What Are The Trends?

Transcription

1 On Track Toward Railways Restructuring: Recent Achievements and Experience What Are The Trends? Louis S. Thompson Railways Adviser

2 Why Restructuring or Concessioning (?) Reduced budget outlays Higher operational efficiency Better resource allocation Better market development Enhanced social equity Effective environmental protection Returns to the budget

3 The Models Available Public supply and operation Outsourcing Management contracts Leasing/Franchise/Concession Concessions Partial divestiture Divestiture in total (BR, NZ, CR, CN) Functional (infrastructure) Separation Private supply and Operation Mix and Match are Possible

4 Concessioning in Railways Government defines and grants specific rights to a company (usually private) A concession agreement details the objectives and allocation of risks Government retains ownership of infrastructure Concessionaire provides services and perhaps facilities, and carries at least some commercial risk Concession has a defined term (5 to 50 years)

5 Dimensions of Concessions Package Size Term Ownership Service Specification Tariff Authority Payments Award criteria Renegotiation conditions

6 Critical Concessioning Issues Duration vs. Investment Speed vs. transitional damage Surplus employees (retirement & redundancy) Who bears what risk (revenues) Regulation» Safety» Economic -- contract versus Commission» Anti-monopoly

7 Privatization of Railways: Back to the Future Integral Privatization (some multiple use)» New Zealand, Canada, Japan, US, TAZRAIL Infrastructure Separation (with sale or franchising of operations)» UK, Romania, Chile, EU railways, Estonia, Poland (?), Australia (many models) Mixtures are possible (and often best)

8 Awarding Options Negotiations, auction, sealed bid Prequalification Flexibility vs comparability Points formula vs. best price

9 Critical Privatization Issues How infrastructure is separated:» Who owns and controls (esp. dispatch.)» Neutral access and acceptable charges Concession (exclusive or non-exc.), sell going concern(s), sell assets? Term (if any) of operating franchises (number and type of pieces), and availability of rolling stock

10 Lessons Confusion is inevitable but action is vital: we can fix mistakes, but inaction is deadly Make sure you have the money Labor is the key, but other social issues are also important Do your homework, especially on role of the railway and the structure of the transactions Keep risk in the right place Don t forget regulation Pay for social functions: avoid cross subsidies

11 World Bank Roles Finance New Construction Repair/Rehab to assist transaction Environmental cleanup Human transitions:» Redundancy/Retirement» Retraining» Relocation/Resettlement Partial risk guarantees IFC investment in operators Technical assistance» Packaging and preparing studies» Marketing» Advice (economic, financial/legal)

12 Argentine Rail Freight Millions of Tonne-Km Year Concessioning Urquiza Before Urquiza After Belgrano Broad Gauge Before Broad Gauge After

13 Suburban Rail Passenger Traffic in Buenos Aires (millions of passengers)

14 Passengers on Buenos Aires Metro: 1970 to Passengers Year Before Concessions After Concessions

15 Labor Productivity on Argentine Railways Tu/Employee (000,000) Year Urquiza Belgrano Broad Gauge Suburban Railways

16 Rail Freight Traffic Growth in Cote d Ivoire/Burkina Faso (million) No data is available for 1988 and 1989 The concessionaire took over in October 1995 and a full year has been extrapolated from the first nine months. Concessioning

17 Rail Labor Productivity in Cote d Ivoire/Burkina Faso (million) No data is available for 1988 and 1989 The concessionaire took over in October 1995 and a full year has been extrapolated from the first nine months. Concessioning

18 Rail Labor productivity in Brazil and Bolivia and After Concessioning (000 TU/Employee) Before After RFFSA: FCA RFFSA: MRS RFFSA: FSA RFFSA: Tereza Cristina RFFSA: Novoeste RFFSA:Nordeste Bolivia: Andina Bolivia: Oriental

19 Rail Freight Tariffs in Brazil Before and After Concessioning (R$/000 T-Km) (govt) 1998 (concessioned) FCA MRS FSA Novoeste Nordeste

20 Comparison of Passenger Concessions Pass. Pass-km Company Lines Line Km Locs Coaches EMUs (000,000) (000,000) Employees Argentina--BsAs Trenes de Buenos Aires Mitre , Sarmiento , Metrovias Urquiza Subte* 38.7/ / / Trans. Metropolitanas Roca , San Martin , Belgr Sur Ferrovias Belgr Norte Brazil--Rio Oportrans Metro 34.96** Bolsa, et al Supervia , * Without/With Premetro ** After opening Arco Verde and Pavuna Comparison of Passenger Concessions

21 EU ORDER and Following Freight Intercity Passenger Regional Passengers Suburban Passengers Infrastructure Ownership Infrastructure Improvement Kept at national level, Can be devolved Infrastructure maintenance may be privatized Control of Operations (Dispatching and Scheduling) Train Movement Equipment Can be Can be Can be devolved Marketing Privatized Privatized Financial Accountability PSO Support Permitted

22 Deutsche Bahn Approach Freight Intercity Passenger Regional Passengers Suburban Passengers Infrastructure Ownership Infrastructure Improvement Infrastructure maintenance Control of Operations (Dispatching and Scheduling) Train Movement DB Infrastructure Mostly DB Infrastructure, but some involvement by states and local government Mostly Operated by DB Passenger under Equipment DB Freight DB Passenger contract with locals, but some are operated Marketing "to be privatized" "to be privatized" by locals Financial Accountability State and Local PSO

23 British Rail Privatization Freight Intercity Passenger Regional Passengers Suburban Passengers Infrastructure Ownership Infrastructure Improvement Infrastructure maintenance All Owned and Operated by RAIL TRACK All Owned and Operated by RAILTRACK Control of Operations (Dispatching and Scheduling) Train Movement Equipment Marketing Financial Accountability EW&S Rail Private 25 Franchises 3 Rolling Stock Leasing Companies ("ROSCOS" : Private) 25 Franchises (Private) Subsidies by local/national governments